You should have now the rootfs of the image in the squashfs-root directory.

Update the manifest files

Back to the rkt repo, in the directory stage1/usr_from_coreos/manifest.d, there are some manifest files that define which files are copied from the Container Linux image to the stage1 image.

You need to go through all of them and check that the files listed correspond to files that are in the actual rootfs of the image (which we extracted in the previous step). Do this from your root directory:

Usually, there are some updated libraries which need an update on their version numbers.
In our case, there are no updates and all the files mentioned in the manifest are present in the updated Container Linux image.

Update the coreos flavor version used by the build system

In the file stage1/usr_from_coreos/coreos-common.mk, we define which Container Linux image version we use for the coreos flavor.
Update CCN_IMG_RELEASE to 1032.0.0 and CCN_SYSTEMD_VERSION to the systemd version shipped with the image (in our case, v229).